India's largest Iranian oil buyer plans almost to halve daily imports, industry sources said on Monday, becoming the latest Asian refiner to cut supplies from Iran as Western sanctions make trade with Opec's second-largest producer difficult. India, China and Japan buy almost half of Iran's estimated 2.6 million barrels per day of oil exports, but a raft of US and European sanctions aimed at choking off funding for Iran's nuclear programme are squeezing its oil supply lines.
State-run Mangalore Refinery and Petrochemicals Ltd, or MRPL, could reduce imports to as little as 80,000 barrels per day (bpd) for the fiscal year starting on April 1, the sources said. It usually buys 150,000 bpd. MRPL officials could not immediately be reached for comment.
Like other Asian nations, India appears to be trying to wean itself off Iranian crude before the sanctions take effect on June 28. MRPL is the third Indian refiner planning import cuts. "There will be a drastic reduction in volumes from Iran," said one source. "For the next fiscal year, MRPL plans to restrict its term deal to 80,000-100,000 bpd." Another source said the refiner planned to only import 80,000 bpd, with the option to buy more.
Iran is the biggest crude supplier to India after Saudi Arabia. If refiners go ahead with plans to cut Iranian imports, they would cut crude purchases from the Islamic Republic by more than 20 percent in the 2012/13 fiscal year, according to Reuters' calculations. That would be more than the at least 10 percent cut the government has unofficially requested refiners should make, sources have told Reuters. The governments in New Delhi and Beijing have publicly criticised US sanctions demanding punishment for the US operations of companies that fail to reduce Iranian oil imports.
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